In this ppt we explained the 4 elements of BCG Model I.e. Question mark, Dogs, Stars and cash cows. Also the limitations of BCG matrix

1. Boston
Consultancy
Group (BCG)
Matrix
-By Priyanshu Gupta

2. The Boston Consulting Group Matrix (BCG) also
referred as the product portfolio Matrix, is a
business planning tool used to evaluate the
strategic position of a firm’s brand portfolio. The
BCG Matrix is one of the most popular portfolio
analysis method.
It classifies a firm’s product or/and services into a
two-by-two matrix. Each quadrant is classified as
low or high performance, depending on the relative
market share and market growth rate.
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4. The horizontal axis of the BCG Matrix
represents the amount of market share of a
product and its strength in the particular
market.
The vertical axis of the BCG Matrix
represents the growth rate of a product and
its potential to grow in a particular market.
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5. The BCG Matrix:
Question Marks

6. Products in the question mark quadrant are in a
market that is growing quickly but where the
product(s) have a low market share. Question
marks are the most managerially intensive
products and require extensive investment and
resources to increase their market share.
Investment in question marks are typically
funded by cash flows from the cash cow
quadrant.
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7. The BCG Matrix:
Dogs

8. Products in the dogs quadrant are in a market
that is growing slowly and where the product(s)
have a low market share. Products in the dog
quadrant are typically able to sustain themselves
and provide cash flows, but the products will
never reach the stars quadrant. Firms typically
phase out products in the dogs quadrant ( as
indicated by B) unless the products are
complementary to existing products or are used
for a competitive purpose.
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9. The BCG Matrix:
Stars

10. Products in the stars quadrant are in a market
that is growing quickly and one where the
product(s) have a high market share. Products in
the star quadrant are market leading products
and require significant investment to retain their
market position, boost growth, and maintain a
competitive advantage.
Stars consume a significant amount of cash but
also generate large cash flows. As the market
matures and the products remain successful,
stars will migrate to become cash cows. Stars are
a company’s prized possession and are top-of-
mind in a firm’s product portfolio.
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11. The BCG Matrix:
Cash Cows

12. Products in the cash cows quadrant are in a
market that is growing slowly and where the
product(s) have a high market share. Products in
the cash cow quadrant are thought of as products
that are leaders in the market place. The products
already have a significant amount of investments
in them and do not require significant further
investments to maintain their position.
Cash flows generated by cash cows are high and
are generally used to finance stars and question
marks. Products in the cash cows quadrant are
“milked” and firms invest as little cash as
possible.
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13. Limitation of BCG Matrix
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1. BCG Matrix classifies businesses as low and high. But generally businesses
can be medium also. Thus, the true nature of business may not be reflected.
2. Market is not clearly defined in Model.
3. High market share does not always leads to high profits. There are high costs
also involved with high market share.
4. Growth rate and relative market share are not the only indicator of
profitability. This model ignores and overlooks other indicators of
profitability.
5. At times, dogs may help other businesses in gaining competitive advantage.
They can earn even more than cash cows sometimes.
6. this 4-celled approach is considered as to be too simplistic.

14. Thank You
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